1
EXHIBIT 10.51
Via Facsimile - 313/525-7804 February 4, 1997
----------------------------
Mr. Xxxx Xxxxxxxx
President
Princeton Dental Management Group
c/x Xxxxx Dental Laboratories
00000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Sale of Assets of Dental Team of Delray Beach
Dear Xx. Xxxxxxxx
The purpose of this letter is to outline the terms and conditions under
which I or my P.A. will purchase and Princeton Medical Management Southeast,
Inc., Princeton Dental Management Corporation, and Florida Dental Team, Inc.,
will sell all of the dental practice assets of the business know as "Dental
Team of Delray Beach." The following represents our agreement and final offer
which must be accepted by you in writing no later than 5:00 p.m. eastern time,
February 5, 1997. If not accepted by you by that time, this offer is revoked.
I. ASSETS. All tangible and intangible assets of Dental Team of
Delray Beach dental practice, including but not limited to, equipment,
supplies, inventory, patient lists, patient records, insurance contracts,
accounts receivable, business records, employment agreements, furniture,
fixtures and supplies all as a going concern. Accounts receivables collected
by you after closing and related to the practice shall be immediately turned
over to us. All assets shall be sold free and clear of all liens, claims and
encumbrances. You will release me from the post-employment restrictions on my
right to practice contained in my Employment Agreement. The parties
acknowledge that Drs. Xxxxxxx and Xxxxxxx and
2
Mr. Xxxx Xxxxxxxx
February 4, 1997
Page 2
Amsterdam Equities Limited have security interests in the assets. All parties
agree to cooperate in obtaining the removal of these liens.
You agree, that within 24 hours of your acceptance of this
offer, you will transfer Xxxxx Xxxxxx back to the Delray office, and she will
remain there until the closing performing all duties in her job description, at
which time she will be employed by me. Also, I will have a right, but no
obligation, to employ the following current staff at the Delray office:
Xxxxxxx Xxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx
Xxx Xxxxxxxxxx
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxx
Constanea Xxxx
Xxxxxxx Fortjon
Xxxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxx - Part-Time
Xxxxxx Xxxxxx - Part-Time
Upon closing, Princeton intends to terminate all listed employees except those
with part-time employment relationships at other Princeton offices.
2. LIABILITIES. Except as specified below, we will assume no
liabilities of the dental practice. We will assume obligations accruing after
the closing date under executory contracts with personnel, and will assume
obligations to personnel for paid time off accrued prior to closing. All debts
and liabilities of the practice accrued as of the closing date will be assumed
and paid by you, except I shall be responsible for paying no more than
$32,282.31 to Xxxxx Xxxxxx Dental Supply and $20,166.70 to A&C Dental
Laboratories and I shall be responsible for completing all pre-paid cases that
the office was handling. As quickly as collections permit, but in no event
later than 90 days of closing, I will place the funds for Schein and A&C in
escrow with my attorney who will coordinate with yours to arrange a payment
plan or settlement. No funds will be removed from escrow without our mutual
3
Mr. Xxxx Xxxxxxxx
February 4, 1997
Page 3
consent. If a pay-out plan on these liabilities that incorporates a discount
is negotiated, we will share in that discount on an equal basis.
3. CERTAIN TAXES. You will pay current as of the date of closing
all tangible and intangible taxes related to the dental practice and its
assets. You will also pay current as of the date of closing, all state and
federal payroll taxes, including but not limited to, Medicare, unemployment,
and Social Security.
4. FRINGE BENEFITS. You will pay current through the date of
closing all accrued but unpaid 401(K) deposits for all employees in the dental
practice. All employment agreements with you will be paid current in all
respects as of closing date, and will be terminated at closing.
5. INSURANCE. You will pay current through the date of closing
all insurance premiums, if any, for worker's compensation insurance,
disability and medical insurance for personnel, and overhead contribution
insurance. You will similarly pay current through the date of closing all
premiums related to the building occupied by the practice.
6. BUILDING RENT. All rent will be paid by you through the date
of closing. I will assume all obligations for rent payments thereafter.
7. RECORD KEEPING. We will maintain in the ordinary course of
business all prior business records of the practice and provide access to you.
If after closing, you require access to such records for any purpose, you shall
pay to us the sum of Fifteen and No/100 Dollars ($15.00) per hour per person
employed by us to assist you in compiling, duplicating, and mailing said
records, plus out-of-pocket duplication or mailing costs. Likewise, you may
impose the same charges for providing me with business records which I request
from you.
8. LEGAL FEES. We will each pay our own legal fees incurred by us
in this transaction.
9. PURCHASE PRICE. The purchase price for this transaction shall
be One Hundred Sixty-Five Thousand and No/100 Dollars ($165,000.00). It shall
be paid as follows: month to month forgiveness of your obligations to pay me
Four Thousand Thirty-Three Dollars and Eighty-Five Cents ($4,033.85) per month
pursuant to the acquisition promissory note and any novation thereof for a
period of 41 months beginning February 28, 1997 through July 30, 2000.
Interest on those notes will not accumulate during this period. Thereafter and
only
4
Mr. Xxxx Xxxxxxxx
February 4, 1997
Page 4
thereafter, your obligation to pay on the acquisition promissory note will be
reinstated. The purchase price represents the following with respect to
respective values:
Equipment - $60,000.00
Patient Files - $20,000.00
Release from Non-Compete - $20,000.00
Phone Number - $10,000.00
Supplies & Inventory - $20,000.00
Good Will - $30,000.00
I agree to cooperate in any future sales of Dental Team assets and to deliver
the appropriate security releases without demand for additional payment so long
as the balance due on my acquisition promissory note remains adequately secured.
10. INDEMNIFICATION. You agree to indemnify and hold me and my
P.A. harmless from and against any and all liabilities, claims, obligations,
debts and accounts payable related to the practice with the exception of those
liabilities expressly assumed by me in this Agreement, and any and all costs or
expenses, including reasonable attorney's fees, including those incurred by us
in enforcing this indemnification obligation, as may be incurred by us as a
result of any breach by you of this Agreement. I agree to indemnify you for
any action or inaction by me which is a breach of this Agreement. Nothing in
this Agreement is intended to release us from our mutual obligations to
indemnify each other as set forth in my Employment Agreement and Management
Agreement. However, I release you from any claims for back wages pursuant to
my Employment and Management Agreement. Neither party will be indemnified or
held harmless for actions caused by their wilful misconduct or gross
negligence. The release for back wages pursuant to the Employment and
Management Agreements includes all claims for any monies which may be due
under those agreements, regardless of whether characterized as wages.
11. DUE DILIGENCE. You shall immediately provide us with such
information and records as we shall reasonably request to determine accounts
payable, accounts receivable, liabilities, and other expenses of the practice,
and to determine the nature and existence of the practice assets, executory
contracts, financial affairs and related matters.
12. BOCA OFFICE. I agree to work as an independent contractor in
your Boca office, and to execute a separate agreement to that effect so long as
the following terms are included:
5
Mr. Xxxx Xxxxxxxx
February 4, 1997
Page 5
a) work on Mondays subject to change or additional days if mutually
agreed;
b) compensation formula of collections minus 35% of associated lab
fees, multiplied by 35%;
c) I will agree to use your lab so long as it is less expensive
than others available to me; and
d) no restriction on my right to continue practicing in Delray, but
I agree not to actively solicit employees or patients of the
Boca office to move to the Delray office.
13. CLOSING. Closing shall occur on February 5, 1997, in Palm
Beach County, Florida. Time is of the essence. Failure to close by said date
shall render this Agreement null and void, and of no further force or effect.
If these terms are acceptable to you, please indicate your acceptance
by signing this letter below and returning it to us. Once signed, this letter
shall be legally binding on each of us.
Thank you for your consideration.
Sincerely,
Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx
ACCEPTED BY:
Xxxx Xxxxxxxx
----------------------------------
Xxxx Xxxxxxxx, as President of the
aforesaid Princeton entities
Dated: 2/5/97
